Category Archives: Energy News

Clean energy to power over seven million homes by 2025 at record low prices

Twelve new renewable energy projects have won Contracts for Difference – enough to power over seven million homes at record low costs.

  • Around 6GW of clean energy is to be added to the grid by 2025 – an important step towards decarbonising our energy system and reaching net zero emissions by 2050
  • Results show the UK’s leadership in offshore wind, creating up to 8,000 jobs across the UK and economic opportunities as we leave the European Union

Twelve new renewable energy projects will be powering over seven million homes at record low prices thanks to the latest round of the government’s flagship Contracts for Difference scheme.

The new projects will provide around 6GW of capacity – 2.4GW more than the last round. For the first time renewables are expected to come online below market prices and without additional subsidy on bills, meaning a better deal for consumers. The costs of offshore wind are now around 30% lower than the second auction held in 2017, with projects now being delivered for as low as £39.65/MWh.

The new projects and lower prices are another step toward decarbonising our energy system as we work toward net zero emissions by 2050, creating jobs and economic opportunities across the UK. According to research by RenewableUK, the new projects could see 8,000 jobs created.

Prime Minister Boris Johnson said:

The UK is leading the way in the fight against climate change, and it’s great news that millions more homes will be powered by clean energy at record low prices.

Seizing the opportunities of clean energy not only helps to protect our planet, but will also back businesses and boost jobs across the UK.

Energy and Clean Growth Minister Kwasi Kwarteng said:

Offshore wind is a British success story, with new projects at record low prices creating new opportunities for jobs and economic growth as we leave the EU.

The support we’re announcing today will mean that over 7 million more homes will be powered by renewable energy as we decarbonise our energy system – crucial as we continue on the road to net zero emissions by 2050.

The Contracts for Difference (CfD) scheme is the government’s primary method of supporting low-carbon electricity. It encourages investment in renewables by providing projects with a stable income while protecting consumers from paying increased support costs when electricity prices are high.

Renewables projects across the UK have been awarded CfDs – from Birmingham to Orkney. Successful technology types include:

  • Offshore wind – wind projects off the UK coast delivering up to a third of our electricity coming from the technology by 2030;
  • Advanced Conversion Technologies – converting waste which would otherwise go to landfill into energy;
  • Remote Island Wind – wind projects on the remote islands of the UK which can take advantage of strong winds.

Today’s results are the latest stage of the government’s support for renewable energy. In March 2019 we signed a ground-breaking £250 million sector deal with the offshore wind industry which committed us to maximising opportunities and sourcing up to a third of electricity from offshore wind by 2030.

Read the results: Contracts for Difference (CfD) allocation round 3

The UK has the largest installed capacity of offshore wind in the world, with around 8GW installed at the end of 2018. This is expected to rise to 10GW by next year, and even further as more projects start contributing power to the grid into the 2020s.

In June the government committed to reaching net zero emissions by 2050 and ending the UK’s contribution to global warming altogether. The UK has already made a strong start in decarbonising its energy system, with renewables generating a record 33% of the country’s electricity last year.

It has been estimated that the low carbon economy in the UK could grow four times faster than rest of the economy out to 2030 and could deliver between £60 billion and £170 billion in exports by 2030. Today’s results demonstrate the potential of renewables to create such ‘green-collar’ jobs.

Ofgem to protect customers of failed supplier Eversmart Energy

Eversmart Energy, an energy supplier with around 29,000 domestic customers and a very small number of business customers has ceased to trade.

Under Ofgem’s safety net, the energy supply of Eversmart Energy’s customers will continue and prepayment meters can be topped up as normal. The outstanding credit balances of domestic customers will be protected.

Ofgem will choose a new supplier to take on all of Eversmart Energy’s customers. This supplier will contact these customers shortly after being appointed.

Ofgem’s advice to Eversmart Energy’s customers in the meantime is to:

  • Not switch to another energy supplier until a new one has been appointed and you have been contacted by them in the following weeks. 
  • Take a meter reading ready for when your new supplier contacts you.

This will make the process of transferring customers over to the chosen supplier, and paying back any outstanding credit balances, as smooth as possible.

Philippa Pickford, Ofgem’s director for future retail markets, said:

“Eversmart Energy customers do not need to worry, as under our safety net we’ll make sure your energy supplies are secure and domestic customers’ credit balances are protected.

“Ofgem will now choose a new supplier for you and whilst we’re doing this our advice is to ‘sit tight’ and don’t switch. You can rely on your energy supply as normal. We will update you when we have chosen a new supplier, who will then get in touch about your new tariff.” 

Updates are available from our website or through our twitter feed @ofgem.

Customers who have questions should visit the FAQs on Ofgem website or https://www.ofgem.gov.uk/ofgem-safety-net-business for business customers. Or if they need additional support, call Citizens Advice on 03454 04 05 06 or email them via their webform. Advice will also be shared on Ofgem’s twitter @ofgem and facebook channels.

Next STEP in fusion [Spherical Tokamak for Energy Production]

The spherical tokamak is a promising type of compact fusion machine, which has been under development since the 1980s. UKAEA will start operating its new spherical tokamak called MAST-U in 2020, opening an exciting new chapter in the drive towards practical fusion energy.

The STEP programme will develop and identify solutions to the challenges of delivering fusion energy, benefiting from UKAEA’s breadth of expertise and its suite of research facilities – RACEMRF, H3AT and FTF – to deliver an integrated concept design.

The technical objectives of STEP are:

  • Deliver predictable net electricity greater than 100MW
  • Innovate to exploit fusion energy beyond electricity production
  • Ensure tritium self-sufficiency
  • Materials and components qualification under appropriate fusion conditions
  • Viable path to affordable lifecycle costs

The UK government has announced £20 million for the first year, launching STEP as a collaborative programme that combines the strengths of UKAEA with industry, universities and other organisations.

STEP offers numerous procurement opportunities, set out in the STEP Programme Procurement Plan Schedule. This is published every quarter and sets out procurement opportunities as well as details of the responsible procurement officer who can be contacted for more information. Note that tender dates are subject to change.

UK government to cut electricity bills for consumers in the north of Scotland

Households in the northern parts of Scotland could soon save money on their electricity bills thanks to UK government plans to more fairly distribute the costs for providing electricity to the Shetland Islands.

The isolated nature of Shetland’s electricity system means it costs £18 million more a year to keep its 23,000 residents’ homes and businesses powered, than it does to provide power on the mainland. The cost is currently picked up by consumers in the north of Scotland through their electricity bills.

These costs are expected to rise to £27 million from next year in order to deliver a necessary upgrade to Shetland’s power supply. The UK government is concerned about the burden this would place on consumers in the north of Scotland.

It has today (11 July 2019) published a consultation announcing plans to spread the costs of powering Shetland across Great Britain from April 2020, meaning consumers across the northern part of Scotland – from Thurso to Aberdeen – would save around £17 a year on their electricity bills.

Minister of State for Energy and Clean Growth, Chris Skidmore, said:

The UK government is committed to ensuring everyone across the country, including in the remotest parts of northern Scotland, has access to a reliable energy supply at a fair price. We’ve already shown this through our price cap – intervening in the market to protect loyal consumers in all parts of the union from being overcharged.

Consumers in the north of Scotland should not have to fund the costs of maintaining Shetland’s energy security alone. The ability to share costs more widely is one of the benefits of being part of the United Kingdom and these plans will mean consumers in the north of Scotland will soon receive a welcome saving on their bills.

Shetland is different to other Scottish islands as it’s the only part of Britain’s licensed distribution network that is isolated. It’s unable to benefit from the economies of scale enjoyed by other islands, which are part of the integrated network, which is why costs have always been higher.

Scotland Secretary David Mundell said:

I warmly welcome the UK government’s plan to cut the electricity costs of consumers in the north of Scotland. Spreading the costs across the whole of Great Britain reflects the unique circumstances in Shetland and northern Scotland. ‎The UK government is determined to deliver for all of Scotland’s communities.

The UK government’s Hydro Benefit Replacement Scheme already provides an annual cross-subsidy of £61 million to protect electricity consumers in the north of Scotland from the high costs of electricity distribution in the region. It is funded by charges on electricity suppliers across Great Britain.

The scheme will be used to deliver the new funding arrangement for Shetland’s electricity, meaning that the total assistance provided through to the north of Scotland consumers will be almost £90 million a year.

New laws to guarantee payment for solar homes providing excess electricity

UK Homes and green businesses generating renewable and low-carbon electricity to be guaranteed money for power supplied to the grid.

New solar homes and businesses creating and exporting electricity to the grid will be guaranteed a payment from suppliers under new laws to be introduced by the government this week (Monday 10 June).

The Smart Export Guarantee (SEG) will ensure small-scale electricity generators installing solar, wind or other forms of renewable generation with a capacity up to 5MW will be paid for each unit of electricity they sell to the grid – tracked by their smart meter.

Residential solar panels are now over 50% cheaper than in 2011. SEG will build on the previous government subsidy scheme, which drove the installations of 850,000 small-scale renewable projects, but without passing on the cost to consumers.

Encouraging suppliers to competitively bid for electricity will give households the best market price for their energy, while providing the local grid with more clean, green energy, as the UK bids to become a net zero emissions economy.

Energy and Clean Growth Minister Chris Skidmore, said:

The future of energy is local and the new smart export guarantee will ensure households that choose to become green energy generators will be guaranteed a payment for electricity supplied to the grid.

We want the energy market to innovate and it’s encouraging to see some suppliers already offering competitive export tariffs to reduce bills. We want more to follow suit, encouraging small-scale generation without adding to consumer bills, as we move towards a subsidy-free energy system and a net zero emissions economy.

SEG will place a legal obligation on energy suppliers with over 150,000 customers –covering more than 90% of the retail market – to introduce export tariffs by 1 January 2020. Some energy suppliers, including Octopus and Bulb, are already offering new smart tariffs, with some exceeding those offered under the previous subsidy scheme. At peak, solar has provided more than a quarter of the UK’s energy demands.

Chief Executive of Octopus Energy, Greg Jackson, said:

These smart export tariffs are game changing when it comes to harnessing the power of citizens to tackle climate change. They mean homes and businesses can be paid for producing clean electricity just like traditional generators, replacing old dirty power stations and pumping more renewable energy into the grid. This will help bring down prices for everyone as we use cheaper power generated locally by our neighbours.

The previous Feed-in Tariffs (FIT) scheme closed to new entrants from 31 March 2019, following consultations in 2015 and 2018, to reduce the costs to consumers as the price of installing solar panels came down.

SEG is designed to continue to grow the small-scale renewables export market by supporting local generation. Combined with existing technologies, like smart meters and battery storage, SEG will help bridge the gap to a smarter and more efficient energy system of the future.

The government is keen to support households and businesses in being able to store energy in batteries in their homes, which consumers will monitor on their smart meters, respond to price signals and choose the most economical times to charge their electric cars and sell their electricity back to the grid. In turn, this will help cut consumer bills, reduce the strain on energy networks, and give consumers more control of their energy use.

The new solar scheme comes as the government will unveil the winners of the latest round of the Energy Entrepreneurs Fund this week. One of the winners, Brill Power, has been awarded £686,000 in grant funding to explore further boosting the lifetime of lithium-ion battery packs for household energy storage and to bring down their cost for consumers.